Telangana on Friday expressed serious concern over cuts in federal budget allocations to states
UPDATE – 11:06 PM, Friday – November 25 22
![Telangana expresses concern over Center budget cuts](https://cdn.telanganatoday.com/wp-content/uploads/2022/07/logo-thumbnail.png)
Telangana on Friday expressed serious concern over cuts in federal budget allocations to states
Hyderabad: Telangana on Friday raised serious concerns over the federal government’s reduction in budget allocations to states through tax hikes and surcharges that will prevent the states from sharing their share.
The state government has also asked the center to fulfill its commitments to the state and approve new projects in the upcoming 2023-24 federal budget, including the second phase of the Hyderabad Metro.
Treasury officials, led by Secretary Ronald Ross, raised various concerns with the center during a pre-budget meeting in New Delhi on Friday. They also came up with proposals and sought federal support for Telangana, which is growing fast and contributing to the state’s economy.
In a 14-page statement, the state government proposed reducing duties and surcharges on petrol and diesel to correct the tariff structure and moderate inflation. This will result in an automatic reduction of the national VAT as it is levied on an ad valorem basis. The center has also been asked to expand capital expenditure to meet budget estimates for 2022-23.
With states at the forefront of providing infrastructure and a conducive ecosystem to attract investment, Telangana sought to extend the Special Assistance Scheme for state capital expenditure for another five years and increase allocations by Rs 2 trillion a year.
The Center was asked to consider off-budget borrowing from the state budget by state public sector companies as expected borrowing by the state from 2023-24 rather than 2021-22 as previously decided.
The state government strongly advocates limiting the share of taxes and surcharges to no more than 10% of total tax revenue, as this is in the state’s interest. The share of duties and surcharges in total federal government tax revenue increases from 2.3% in 1980-81 to 20% in 2022-23.
In order to effectively implement the Centrally Sponsored Scheme (CSS), Telangana seeks to reduce the number of schemes and allow states to select some schemes from the CSS that suit their respective requirements on the advice of the sub-committee of the Chief Minister’s Panel comprising Niti Aayog.
The state government has asked for Rs 1,350 crore of outstanding funds under the Andhra Pradesh Reorganization Act to be allocated for the development of underdeveloped areas and extended for the next five years.
Under the Act, it also seeks tax incentives to facilitate industrialization, grant Kaleshwaram project a state project status, revive the Information Technology Investment Region (ITIR) project and allocate necessary funds, and resolve outstanding issues in this regard.
Also, the authority wants the center to allocate Rs 8,453 crore in the 2023-24 Union Budget for the second phase of Hyderabad Metro between BHEL and Lakdikapul as a joint project of the central and state governments.
They are also seeking grants for the Mission Bhagiratha scheme on the recommendation of the 15th Finance Committee. The state government hopes the federal government will not impose too many restrictions on jobs under the Mahatma Gandhi National Rural Employment Guarantee Scheme.